Surprise: Jobless Rate Falls to 8.6 Percent

Older workers share good news

Defying predictions, the nation's unemployment rate fell almost half a percent to 8.6 percent in November, the lowest level in nearly three years, as employers added 120,000 new jobs, the government reported.

Older workers saw welcome gains too. The jobless rate for people 55 and older fell to 6.4 percent in November from 7 percent in October. It was the lowest rate for this group since March 2009.

But once again, for older American out of work, the job search was long and painful. The average duration of unemployment moved stubbornly higher for older workers, to 58.2 weeks, up from 52.9 weeks in October. For younger workers, it edged up to 38 weeks.

"We're definitely better off this year than last year," said Bill Watkins, executive director of the Center for Economic Research and Forecasting, a think tank in Thousand Oaks, Calif.

"Economic activity has grown every quarter and there's been some job growth," he said. "It's weak, but you've got to crawl before you can run." Among men 55-plus, the jobless rate dropped to 6.8 from 7.2 percent the previous month. The figures moved in the right direction for older women as well — 5.8 percent last month from 6.5 percent in October.

In other good news that could signal a slow but steady economic turn-around, the government revised upward job growth figures for the last two months. September had the biggest gains at 210,000 new jobs, up from the initially reported 158,000. October's numbers jumped to 100,000 new jobs from 80,000.

Retail top gainer

Retail led the month with the most job gains (50,000), indicating that the industry anticipated stronger sales over last year and hired more workers.

Gains were also reported in the leisure and hospitality sector (22,000), in professional and business services (33,000), and in health care (17,000).

Layoffs continued in local, state and federal government agencies. Among 20,000 government jobs lost in November, 11,000 were from local governments.

Employment conditions vary state by state. To see how yours measures up, go to the AARP "pain index."

With unemployment stuck at 9 percent or higher since last April, few analysts saw the big drop coming. But economists cautioned that while more people were working, the decline was caused in part by about 300,000 people leaving the labor force and no longer being counted as unemployed.

For a sustained recovery, major challenges remain: The housing market is still in a sink hole, draining household wealth. Consumer spending is restrained and employers are reluctant to add jobs until they're confident that the upward trends will last.

The European debt crisis continues to threaten the fragile recovery and create volatility in financial markets.